Regulatory Capital

The Bank of East Asia returned to the market with a Basel III-compliant additional tier one (AT1) deal, paying no premium despite reporting disappointing interim results for the first half of 2019 and amid the turmoil in Hong Kong SAR.

Bank of Montreal and Rothesay Life made use of the quieter political situation in the UK this week to issue in sterling, in the same week issuance paced down in the euro market ahead of the European Central Bank’s meeting.

Achmea put out a statement on Wednesday in which it reminded investors to rely on Bloomberg for information about upcoming issuances, amid speculation that it was considering raising restricted tier one or tier two notes.

Rothesay Life chose a quieter day in UK politics to issue a tier two in the sterling market on Tuesday. It also took advantage of the lack of supply in the currency and the deal was oversubscribed four times its £400m size.

Groupama seized an opportunity to replace one of its outstanding tier twos with a cheaper set of capital instruments on Monday, drawing on sizeable demand for higher yielding assets in the euro market.

Bank of Ireland was unable to complete the sale of a tier two transaction this week, after the UK Parliament descended in chaos. Bond buyers have by and large taken a pragmatic approach during Brexit negotiations, but market participants said that on this occasion the Irish issuer had “misjudged” how nervous investors were, writes David Freitas.

FIG bond bankers are worried, as one put it, that “the steam is coming out of the Kangaroo market” after Thursday’s additional tier 1 (AT1) deal from Société Générale failed to reach the heights of deals from UBS and BNP Paribas earlier in the summer.

Chinese city commercial bank Bank of Jinzhou plans to cancel coupon payments on its dollar additional tier one bonds for a year, the first such case from a mainland lender. The “shock” move from the beleaguered firm could shake investors’ risk appetite for bank capital deals from the country, writes Morgan Davis.

Bank of Ireland abandoned plans for a new €300m tier two on Tuesday after struggling to build much enthusiasm around the transaction. Market participants said the Irish lender had fallen victim to growing fears of a ‘no deal’ Brexit.